By Fred Arnold:
I just figured out that the stock market has nothing to do with reality when it comes to the true direction of the economy. The stock market used to be a real indicator of economic direction, or let me say that the market used to react to the true direction of the economy. This week the stock market had its ups and downs, but the reason for the movements is what is not only surprising, but shocking. It is for this reason I finally learned that logic does not prevail in any way in the stock market today. Despite the fact that we had a week of poor economic reports on housing, jobless claims, and other areas (I will provide you the details of these reports in a moment) it is clear that these reports just do not matter. When you read the next paragraph, you too will realize the confusion of the markets.
Investors this week primarily focused on the fact that they believed on Friday at 10:00AM when Ben Bernake speaks, he would give an indication that a 3rd round of economic stimulus may be coming. Please understand that he has not indicated in any way that there will be a stimulus announcement. It is all speculation on the part of market investors. Well... the stock market posted a nice rally on Wednesday in hopes of his stimulus announcement. On Thursday the stock market dropped because the European Debt Crisis was back in focus. (I didn't know that it ever should have stopped being in focus) Then on Friday, Bernake announces, essentially that the economy is going nowhere fast. In addition, he made it clear that the government has minimal resources to assist in the recovery. So what do you think the stock market did? It tanked over 200 within minutes of the announcement. (Am I the only sane person that realizes that all the market movement on Wednesday and Friday was based upon nothing but, well... nothing)
Click here to get the weekly SCV Your Home Inside And Out Newsletters delivered right to your inbox! 
The major economic reports that the market did not pay much mind to this week were that New Home Sales declined .7% last month. Mortgage Rates rose ¼%, and First Time Jobless Claims continue to remain above 400,000.
By the way, if Bernake stated that the government is limited in what it can do to stimulate the economy, then do you really think President Obama's announcement after Labor Day will be of any substance?
Let us see what reports the market has on tap for us next week that investors may not give any attention
o Monday August 29th - Pending Home Sales
o Tuesday August 30th - S&P Case Shiller Home Value Index, Consumer Confidence and FOMC Minutes
o Wednesday August 31st - MBA Mortgage Applications and the ADP Employment Report
o Thursday September 1st - First Time Jobless Claims and ISM Manufacturing Report
o Friday September 2nd - National Unemployment
Have a great week and keep smiling!